The Routledge Companion to Contemporary Brand Management

Francesca Dall'Olmo Riley, Jaywant Singh, Charles Blankson, Francesca Dall'Olmo Riley, Jaywant Singh, Charles Blankson

• Editore: Routledge
• Anno: 2016
• ISBN:
  9781317751571
• Edizione: 1
• Argomento: Business
• Categoria: Marketing

The amount and range of brand related literature published in the last fifty years can be overwhelming for brand scholars. This Companion provides a uniquely comprehensive overview of contemporary issues in brand management research, and the challenges faced by brands and their managers.

Original contributions from an international range of established and emerging scholars from Europe, US, Asia and Africa, provide a diverse range of insights on different areas of branding, reflecting the state of the art and insights into future challenges.

Designed to provide not only a comprehensive overview, but also to stimulate new insights, this will be an essential resource for researchers, educators and advanced students in branding and brand management, consumer behaviour, marketing and advertising.

Part I
What is a brand and how do we measure its market performance?

1
Brand definitions and conceptualizations

The debate¹

Francesca Dall’Olmo Riley

Keywords

brand construct, brand definition, brand differentiation, brand elements, brand equity, brand growth.

Introduction

The starting point of this Companion to contemporary brand management is necessarily the debate related to the fundamental question of ‘what is a brand’ and the definition of ‘the brand’ construct. Although, as Keller (2006: 260) notes, ‘much progress has been made’, de Chernatony and Dall’Olmo Riley’s (1998: 417) observation that ‘a theory of the brand remains missing’ still holds true today and there is wide disagreement among researchers particularly with regard to:

• defining ‘the brand’ construct;
• conceptualizing and measuring ‘brand equity’;
• establishing the relative importance of ‘tangible’ versus ‘intangible’ or ‘emotional’ brand elements, particularly with regard to the ‘behavioural’ versus ‘attitudinal’ brand loyalty debate;
• whether a ‘romantic’ or a ‘realist’ standpoint on brands and their management should prevail.

The examination of what a brand is or, more importantly, how it is understood, is related to different perspectives on the construct of ‘brand equity’ and to the diverging standpoints on brand management. After an outline of the ongoing debate in defining the brand construct, this chapter presents an overview of perspectives about brand equity in brand management research and the ensuing challenges for researchers and practitioners. The chapter sets the scene for the extensive discussions relating to the measurement of brand performance in Chapter 2 (and in Chapter 13), the measurement of customer-based brand equity in Chapter 3 and the financial value of a brand in Chapter 4.

A theory of ‘the brand’?

There is no universally accepted definition of the brand construct. The American Marketing Association’s (AMA) 1960 definition of the brand as a ‘name, term, sign, symbol, or design or a combination of them intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competitors’ is widely cited, particularly in the academic literature and textbooks originating from North America (e.g. Aaker, 1991; Keller, 1993 and 2008; Kotler and Armstrong, 2007). With few exceptions (e.g. Ewing et al., 2009), the 1960 version of the AMA’s definition is the one still cited today, instead of the more recent, shorter but conceptually equivalent version that is currently found in the online Dictionary of Marketing Terms available on the AMA website: ‘a name, term, design, symbol or any other feature that identifies one seller’s good or service as distinct from those of other sellers’ (www.ama.org/resources/Pages/Dictionary.aspx?dLetter=B, accessed 23 November 2015).

Interestingly, the AMA’s Dictionary of Marketing Terms also reports an ‘added definition’ of ‘brand and branding’ as:

A brand is a customer experience represented by a collection of images and ideas; often, it refers to a symbol such as a name, logo, slogan, and design scheme. Brand recognition and other reactions are created by the accumulation of experiences with the specific product or service, both directly relating to its use, and through the influence of advertising, design, and media commentary.

(www.ama.org/resources/Pages/Dictionary.aspx?dLetter=B,
accessed 23 November 2015).

This ‘added definition’ reflects the fact that, in spite of its popularity, the original 1960s AMA definition is often criticized as too preoccupied with the product (e.g. Crainer, 1995), too mechanical (Arnold, 1992), ‘deconstructionist’ (Kapferer, 1992), reductionist and restrictive (de Chernatony and Dall’Olmo Riley, 1998) and out of touch with reality, being focused on the notion of a ‘small b’ brand versus the practising managers’ preference for a ‘big B’ Brand perspective (see Keller, 2006).

A ‘small b’ brand notion focuses mainly on the firm’s input activity (de Chernatony, 1993) of differentiating its offering by means of a name and a visual identity, enabling consumers to recognize different brands at the point of purchase. This is akin to the interpretation of the brand as a ‘logo’. According to this perspective, there is little difference between a ‘brand’ and a ‘trademark’, as defined by the US Federal Trademark Act (Lanham Act): ‘any word, name, symbol, or device, or any combination thereof adopted and used by manufacturers or merchants to identify their goods’ (see Cohen, 1986: 62). As a matter of fact, the AMA Dictionary of Marketing Terms notes that a trademark is: ‘A legal term meaning the same as brand. A trademark identifies one seller’s product and thus differentiates it from products of other sellers. A trademark also aids in promotion and helps protect the seller from imitations.’ (www.ama.org/resources/Pages/Dictionary.aspx?dLetter=T, accessed 23 November 2015).

Thus, while the interpretation of the brand as a ‘logo’ enables recognition, the brand as a ‘legal instrument’ enables prosecution of infringers. In either case, however, the brand concept is devoid of deeper meaning, hence its ‘small b’.

In contrast, a ‘big B’ Brand notion sees brands as more than mere identifiers and legal instruments, but as complex entities and value systems. As stated as early as 1955 by Gardner and Levy: ‘A brand name is more than the label employed to differentiate among the manufacturers of a product. It is a complex symbol that represents a variety of ideas and attributes’ (1955: 35). More recently, Kapferer (2008: 171) added to this, asserting: ‘A brand is not the name of a product. It is the vision that drives the creation of products and services under that name. That vision, the key belief of the brands and its core values is called identity.’ However, a more holistic stance of the ‘big B’ Brand blends the input of the firm (brand elements and brand identity), with the ‘output’ perspective (de Chernatony, 1993) of the brand as an image, or set of mental associations in consumers’ minds, which add to the perceived value of a product or service (Keller, 2008). Taking this a step forward, the brand can be conceptualized as a ‘“value system” which transforms the usage experience through the subjective meanings the brand represents for consumers.’ (de Chernatony and Dall’Olmo Riley, 1998: 427).

De Chernatony and McDonald’s (2003: 25) definition of a successful brand as:

an identifiable product, service, person or place, augmented in such a way that a buyer or user perceives relevant and unique added values which match their needs more closely. Furthermore its success results from being able to sustain these added values in the face of competition

reflects the holistic ‘big B’ notion of the Brand. While retaining the ‘input’ (what the company does) perspective of the brand as an ‘identifier’, de Chernatony and McDonald introduce the notion of the brand as adding value to a product and, importantly, that a brand’s success is dependent upon consumers’ perceptions of whether the brand matches their needs better than other brands in the product category. It then follows that being able to sustain consumer perceptions of a brand’s differential value is the key to successful brand management. For the firm, therefore, a well managed brand becomes an important instrument of differentiation and of competitive advantage (Porter, 1976; Hamel and Prahalad, 1996). Furthermore, the differentiation achieved through branding constitutes a barrier to entry, by making it difficult for competitors to emulate the company’s offerings (Jones, 1986; de Chernatony and McDonald, 2003).

The concept of the brand as perceptions in consumers’ minds and of the added value a brand brings either to the consumer or to the organization is at the basis of the so-called ‘equity’ of the brand. This is the second contentious area in the branding literature.

Conceptualizing and measuring ‘brand equity’

As also evident from Chapters 2, 3 and 4, ‘brand equity’ is a very much discussed, complex and multifaceted concept which has caused great controversy among academic researchers and practitioners alike. Disagreement between researchers persists on the dimensions of ‘brand equity’ and, particularly, on the issue of its measurement. Some even question the usefulness and relevance of the ‘brand equity’ concept.

First, as Kapferer (2008) remarks, two ‘brand equity’ paradigms do exist: the first is customer-oriented, is based on the relationships consumers have with the brands they buy, from indifference to attachment, and focuses on the consequent relative ‘strength’ of the brand. This paradigm is the focus of Chapters 2 and 3. In contrast, the second ‘brand equity’ paradigm is concerned with the brand’s financial value, as a separable asset (e.g. Simon and Sullivan, 1993; Chu and Keh, 2006; and Chapter 4 in this Companion). To these two approaches, Feldwick adds a third interpretation of ‘brand equity’ as a ‘description of the associations and beliefs the consumer has about the brand’ (1996a: 87) (see Chapter 3 of this Companion).

Within the customer-oriented paradigm of ‘brand equity’ is Keller’s (1993) definition in terms of ‘the marketing effects uniquely attributable to the brand’ (p. 1); more precisely Keller defines customer-based brand equity as ‘the differential effect of brand knowledge on consumer response to the marketing of the brand’ (p. 2). As noted by Barwise (1993) and by Ailawadi et al. (2003), this notion of differential effect or ‘added value’ is found in many customer-oriented definitions of brand equity. For example Farquhar (1989: 24) defines brand equity as the ‘“added value” with which a given brand endows a product’. Similarly, from an information economics perspective, Erdem and Swait (1998) note that brands act as a signal of a product’s position in the marketplace and, as such, they increase consumer-expected utility by decreasing both information cost and perceived purchase risk: ‘consequently, consumer-based brand equity can be defined as the value of a brand as a signal to consumers’ (Erdem and Swait, 1998: 140). An outcome of this differential effect or consumer-expected utility and, possibly, a measure of a brand’s equity, is consumers’ willingness to pay a premium price for the brand. Hence, Axelrod (1992) defines brand equity as: ‘the incremental amount your customer will pay to obtain your brand rather than a physically comparable product without your brand name’.

Overall, these customer-based, added value perspectives of brand equity fit within the ‘big B’ notion of the Brand put forward by the definition of de Chernatony and McDonald (2003) and with the concept of a brand’s differentiation and strength as a measure of its success.

The brand equity perspective of the firm is also concerned with the notion of the differential effects that accrue to a product due to its brand name. For example, Farquhar (1989: 25) notes that ‘brand equity also imparts competitive advantages to the firm’, in terms of providing opportunities for licensing and brand extensions. Brand equity also makes the brand more resilient to crisis situations and competitive attack, as well as more readily accepted and more prominently displayed by the trade. The financial paradigm of brand equity also takes the perspective of the firm and is generally expressed in terms of the incremental cash flow or profit that can be attributed to a brand (Barwise et al., 1990; Simon and Sullivan, 1993). However, value can be subtracted as well as added, as remarked by Aaker’s (1996: 7) definition: ‘Brand equity is a set of assets (and liabilities) linked to a brand’s name and symbol that adds (or subtracts from) the value provided by a product or service to a firm and/or that firm’s customers’.

Despite overall agreement among researchers on the general notion of brand equity in terms of the differential effects attributable to the brand, disagreement persists on whether equity should be measured from the consumer or from the firm ...